Five Ways To Manage Your Debt
Getting out of debt requires a lot of will power and can be quite difficult to do, but with the New Year coming up, it’s about time you took some action to manage your debt and stay out of it.
If you wish to get out of debt soon, here are some tips you can follow.
1.) Knowledge is power. If you know that you need to settle your debts, then face the music. Don’t just write them down – sort them out from largest to smallest Microsoft Excel or other spreadsheet programs will be your best friend, and some other information you could include are amount owed, interest rate on individual debts and name of the debtor.
2.) Write down how long it’ll take you to pay off them off if you keep paying exactly what you’re paying now. Pay as much extra on the minimum as you can afford each month. There are two schools of thought – one is the conventional idea that you have to pay balances in order of interest rate, while others believe you should sort the balances to be paid from smallest to largest. It doesn’t really matter as long as you pay everything off eventually.
3.) One of the most important questions you can ask yourself is if you can afford your current mortgage. If you’ve been hospitalized, laid off, or had your income reduced for one reason or another and it’s affecting your mortgage payments, don’t hesitate to call your mortgage company.
Most lenders offer customers a mortgage modification plan if this is the case. This is actually simpler than it sounds – this just involves having your original terms and conditions modified until you can get a lower interest rate and monthly payments on your mortgage.
Your living quarters can also use some downsizing if it helps you cut back on your debts, spending and daily expenses. This would just be a temporary arrangement until you are able to get back on your feet.
4.) Pay attention to your bills. It may sound like too much of a no-brainer, but believe it or not, there are people who don’t bother to check their bills and just pay them as-is. Have you ever tried paying your utility bills sight unseen?
And it would be too late when you’d discover a few months later that you have been overcharged for a thing or two. Nobody wants to be overcharged for anything – they would rather use that extra money to pay a utility bill or something.
5.) Set aside some money every payday to place in your savings account. Don’t worry if it isn’t much.
There’s no need to rush paying your debts as long as you pay them off eventually and get your spending under control. There’s no such thing as a debt that you cannot eventually pay off. There’s help available if you feel lost, confused or frustrated.